STIR: Next Fed Cut Nears Being Fully Priced For April Before CPI

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The weekly ADP report offers another timely update on labor conditions, watched to see if last week’s decline is revised and for latest momentum heading into November.

• The weekly ADP report will be released today at 0815ET, covering the four weeks up to Nov 1.
• Last week’s release was the first one when we knew it would be published and saw some dissemination issues.
• It was first published here: https://www.adpresearch.com/the-ner-pulse/ although ADP said beforehand that it would be published here: https://www.adpresearch.com/category/mainstreet-macro/. We’ll monitor both but expect a smoother release this week.
• Last week’s release suggested a return of private sector job losses in data up to Oct 25 with a four-week average decline of -11.25k jobs on a week-on-week basis. On its own it points to renewed sizeable deterioration in net job creation after some stabilization in the monthly October report with its +42k (for its reference week including the 12th of the month).
• ADP has warned that these data are preliminary and can be revised although last week’s release made it difficult to accurately assess these revisions in a timely manner.  
• Fed Governor Waller (voter, dove), who is one of the leading voices calling for further cuts including at next month’s meeting, has referenced ADP data for some time. That included in yesterday’s speech (link): “While the ADP data are quite volatile and have some other shortcomings that make them less reliable than government statistics, I do think these data are telling us something. And in September and October, ADP reported that businesses created a net total of only 6,500 jobs a month. And the latest weekly data are even weaker.”

Source: Bloomberg Finance L.P.